Seattle Office Space News – July 2017

7/ August 2017

Below are comments and links to news articles and other topics relevant to the Seattle office space market from the month of July 2017.

OFFICE DEVELOPMENTS

The long saga of the Civic Square redevelopment seems to be moving in the right direction again. Ed Murray sent legislation to the City Council that would authorize the City to sell the development site to Bosa. Bosa has plans for a condo tower, street level retail, and a 25,000 square foot public plaza. Construction is expected to begin in 2019.

In the real estate hotbed of South Lake Union, two midrise options have emerged for the site at 235 ninth Ave that recently sold for $625/sf. The first option for the 14,400 square foot site is a seven story office tower and the second is for an eight story hotel.

BUILDING SALES

Just one office building traded hands this month, with the Amazon leased 428 Westlake fetching $81.5 million. An affiliate of Vulcan sold the 88,000 square foot building for just over $923 per square foot to an affiliate of Commonwealth Realty Trust.

OFFICE LEASES

In other Amazon news, the e commerce giant is listed on permits for improving the former Pemco headquarters building at 301 Eastlake Ave East. The existing buildings total 168,300 square feet and there is the ability to add an additional 500,000 square feet of office space on the site. Amazon officials declined to comment and it is unclear how much space Amazon has leased at the site.

ECONOMY

The Seattle economy continues to be one of the most prosperous in the nation. Washington State was recently ranked first on CNBC’s America’s Top States for Business. The state recorded the largest economic growth in the nation at 3.7 % in 2016 nearly 2.5 times the national average.

Another ranking put Seattle as the second best tech city in the U.S. behind only the Bay Area. Real Estate Company CBRE issued the report based on metrics such as number of tech employees, population trends, wages, education levels, housing and business costs. Seattle is the most educated market in the country with 62.1 percent of people over 25 holding at least a bachelor’s degree.

With an influx of capital pouring into the city, Seattle continues to be at an all-time high construction boom. There are currently 74 major construction projects from South Lake Union to Sodo, totaling nearly $5 billion in project cost. The previous record was 65 buildings under construction last year, that number is more than 60 percent higher than the peak of last decade’s boom. About two thirds of that construction is apartment buildings with 40% of those being “luxury” apartments.

The housing market also continues to be hotter than ever. In May the regions single family home price increased 13.3 percent year over year more than double the national average of 5.6&. The May price increases was the ninth month in a row that Seattle saw the largest year over year price increase in the nation. Experts agree that as long as job growth continues and interest rates remain low, there is no sign of a slowdown anytime soon.

Even with rising home prices, Seattle has not quite caught up to the Bay Area in terms of cost of living. Currently in Seattle the average cost of living is $45,744 with the median income at $75,301. Over the next twenty years the City is expected to grow by more than 200,000 which will continue to push the cost of living higher and higher

TUNNEL/VIADUCT

Crews are more than halfway done disassembling the tunnel boring machine Bertha. There have been no delays in the project for several months and the new four-lane tolled Highway 99 is expected to open in early 2019.

ARENA

There was no significant update this month regarding a potential redevelopment of Key Arena or a new site in Sodo. However, the city did create a community group of thirteen that will work with the city and Oak View Group to evaluate and recommend on the potential key arena redevelopment.

OTHER NEWS

Geekwire took a look at Qualtrics Seattle office which has grown to be the largest outside of its headquarters in Utah.

The PSBJ also took a look through the new office of Seattle’s newest public company, Redfin.

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